Form 2439 - Notice to Shareholder of Undistributed Long-Term Capital Gains

Form 2439 - Notice to Shareholder of Undistributed Long-Term Capital Gains

Form 2439 is used by regulated investment companies (RICs) and real estate investment trusts (REITs) to report undistributed long-term capital gains to their shareholders. This form is essential for shareholders to accurately report their share of these gains on their individual tax returns.

Key Sections of Form 2439

• Box 1a: Reports the total undistributed long-term capital gains allocable to the shareholder. This amount is derived from Form 2438 or its current revision.
• Box 1b: Indicates the portion of the gain attributable to unrecaptured section 1250 gain from the disposition of depreciable real property. Individual filers report this on the Unrecaptured Section 1250 Gain Worksheet in Schedule D (Form 1040) instructions.
• Box 1c: Represents the shareholder’s allocable portion of gains from the sale of qualified small business stock (section 1202 gain). Individual filers should refer to the Schedule D (Form 1040) instructions for exclusion details.
• Box 1d: Shows the portion of the gain attributable to collectibles (28% rate gain). This must be reported separately on Schedule D (Form 1040).
• Box 2: Displays the tax paid by the RIC or REIT on the undistributed long-term capital gains. Shareholders may claim a credit or refund for this tax.

Reporting Requirements for Shareholders

• Individuals must report the total amount from Box 1a on line 11, column (h) of Schedule D (Form 1040).
• Estate and trust shareholders report this amount on Schedule D (Form 1041).
• Corporate shareholders report it in Part II of Form 8949.
• If any amount is in Box 1b, 1c, or 1d, special instructions apply for reporting on Schedule D. Refer to the Schedule D instructions for detailed guidance.

Form Distribution and Filing

• RICs and REITs must furnish Copies B and C to shareholders by the 60th day after the end of their tax year.
• Copy A must be attached to Form 1120-RIC or Form 1120-REIT when filed with the IRS.
• Copy D is retained for the RIC’s or REIT’s records.
• If you are a nominee, enter your name as “Nominee” in the RIC’s or REIT’s name block and provide the actual owner with Copies B and C.

Important Notes

• The RIC or REIT may truncate a shareholder’s identifying number (e.g., SSN) on Copy B/C, but full numbers must be reported to the IRS on Copy A.
• For IRA shareholders, Copies B and C should be sent to the IRA trustee or custodian, not the account owner.
• For more information on Form 2439, visit www.irs.gov/Form2439.

Source:

Form 2439 - Notice to Shareholder of Undistributed Long-Term Capital Gains

Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.